Democrats Vs. Branstad Over Tax Cut

There was emotional testimony today before a legislative committee over a new tax break for Iowa manufacturers which Democrats say the legislature should have signed off on.

The Branstad administration proposes a sales tax exemption on more of the supplies manufacturers purchase, from drill bits to lubricants and coolants, and from saw blades to air filters and hydraulic fluids.

Taxes are levied on finished products, and companies say also taxing the items they need for manufacturing amounts to a double tax.

Spokeswoman Victoria Daniels says the Iowa Department of Revenue is proposing the change at the request of the Iowa Taxpayers Association:

Critics object to the estimated 46-million cost of the tax break, given Governor Branstad’s vetoes of education funding this year. Several school officials went before the Administrative Rules Review Committee to argue against the tax cut.

“This rule is an overreach, it's a bad precedent, and the Branstad administration should withdraw the rule,” says Iowa City Democratic Senator Joe Bolkcom.